How to get a buy to let mortgage… a guide for first time landlords

You’re considering becoming a first-time landlord: can you get a mortgage? In short, yes. But that’s not all you need to know…

There are two types of “first timers” in the Buy to Let (BTL) property investment world, who will have quite different options available to them, so let’s distinguish:

First Time Landlords:
Someone who owns their home, but is purchasing their first investment property.

First Time Buyers:
Someone who, at the point of applying for the BTL mortgage, does not own any property.

First Time Landlords

How can I get a BTL mortgage? Whether as an individual or under a company, as long as you meet a lender’s criteria you should be able to get a BTL mortgage without any letting experience. There are very few lenders who specifically exclude “first timers” from their books.

Will the criteria be stricter for me? No, as a first time landlord, you will not have to pay a higher interest rate, have a higher income or be expected to put down a larger deposit compared to an experienced landlord.

What restrictions might apply? While it is relatively easy to get a BTL mortgage as a first timer, you may come up against restriction on what type of BTL property you can get. Often, lenders will only accept Houses of Multiple Occupancy (HMOs) and Multi-Unit applications from experienced landlords. So, you’re likely to get a better deal by sticking to the more “vanilla” portfolio of single-occupancy apartments or houses for your letting debut.

First Time Buyers

I don't own my own home but I want to buy a rental property, can I still get a BTL mortgage? Unfortunately, most BTL lenders do not lend to first-time property owners. If they do, they are likely to work on an affordability model (like a regular homeowner) to determine how much to lend you, rather than the usual rental calculation. This can decrease the amount they are willing to lend you which may significantly restrict what and where your property is.

Are there any lenders who will use the usual rental calculation for first time buyers? There are a couple, however, they require a much higher minimum income (from £40k+) to do so. If this works for you, then great! You can get a BTL mortgage either in your name or through a company at standard rates and deposits.

If you are looking to buy your first rental property, we are here to help! For advice on what mortgage you can secure, as a first time landlord or even a first time buyer, give me a call on 01732 471 647 or email me at JeniB@mortgagesforbusiness.co.uk


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NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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